Forex info and strategy. This is your source for all things related to the foreign exchange market. You will not be sorry to learn the ropes of this great market.The market for foreign exchange is huge and it?s one of the fastest growing areas of Forex trading.
There are many things you can do to make sure you are prepared for this type of trading including learning about the forex market, learning about the different currencies, learning about the technologies used in the market, and getting into the know about the different currencies. Once you learn all there is to know about Forex trading, you know you have to be ready to take advantage of this opportunity.Foreign exchange is the process of exchanging currencies, such as U.S. dollar for U.S. dollar, European pound for European pound, Japanese yen for Japanese yen, and others.
A currency is considered to be “inverse” to the currency of the same country.
This means that the currency of one country will be more profitable for trading in. If you will be trading in currencies, it is important to know the relationships between currencies.
Currencies are traded in dollar amounts called lots.
Currency value of a currency is equal to the currency value of another currency. For example, $1 USD equals 1 USD. You will hear people saying that the EUR/JPY is “discounted” against the USD. But in reality, the exchange rate between EUR/USD is what most people are referring to when they say “EUR/USD”.
The major currencies like EUR/USD, GBP/USD, CAD/USD, and USD/CAD are all inverse of each other.
This means that as long as the EUR/USD is above $1 USD, you get the USD. And as long as the USD/CAD is below $1 CAD, you get the CAD.
You may ask what the big deal is with the EUR/USD. Well, it?s the “spread” between the EUR and USD.
The spread is the difference between the bid price and ask price.
In the above example, the bid price is $1.2345 and the ask price is $1.2365.
This means that you can buy the EUR at $1.2345 and sell it at $1.2365 for $1.2345.
This is your gain. But you have paid the broker a premium cost which is often not worth it. The reason why this is important to understand is that the broker is hedging his position.
He is trying to protect himself from the variance in the ask price and the actual price. If he cannot do it, he has lost money. A broker cannot afford to trade on the “dips”. He must trade in the “basis”.
He?s selling his EUR/USD and must buy the EUR at the ask price. But the good thing about the EUR/USD is that it always has a fixed maturity. So when the broker sells his EUR/USD, he?s not trading against it, but rather buys it at the ask price.
The broker does not want you to feel shortchanged.